Professional Documents
Culture Documents
Górecka & Szaluka (2013) Country Market Selection in International Expansion - Multicriteria
Górecka & Szaluka (2013) Country Market Selection in International Expansion - Multicriteria
Vol. 8 2013
Dorota Górecka*
Małgorzata Szałucka*
Abstract
*
The Faculty of Economic Sciences and Management, Nicolaus Copernicus
University in Torun, e-mails: dgorecka@umk.pl, m.szalucka@umk.pl.
32 D. Górecka, M. Szałucka
1 Introduction
These days business is conducted in an increasingly globalized environment
characterized by fewer barriers, growing competition and greater opportunities
for international expansion.
Before expanding abroad a company must take various strategic decisions.
One of them is the choice of international markets worth entering. The
identification of promising foreign target markets is a vital issue for the future
success of the enterprise as errors committed at this stage can be very costly.
A wide range of factors need to be considered by a firm choosing new
markets, including economic, political and cultural elements. Hence, this issue is
a multi-criteria decision-making problem and it can be solved with the help of
MCDA methods.
The aim of this paper is to apply multi-criteria decision aiding methods to the
problem of market selection. This paper will illustrate the usefulness of these
methods with a real-life example of a leading manufacturer and distributor of
hygiene, cosmetic and medical products in its quest for new markets. The scope
of the paper is limited to a preliminary screening analysis based on external
factors represented by a set of macro-level indicators. The internal factors
relating to the firm, its resources, international experience, applied competitive
and functional strategies are beyond the scope of this analysis.
This article consists of an introduction, a conclusion and five sections. In the
second section the market selection process in international expansion is
described. In the third section the first stage of the assessment of foreign
markets, namely preliminary screening, is presented in more depth. The fourth
and the fifth sections, in turn, include the description of the case study and the
solutions obtained as a result of applying the MCDA methods. Finally, in the
conclusion the results of the sensitivity and robustness analysis are shown.
identify the target market or markets in which it wants to offer its product. This
is known as international market selection (IMS). More detailed information
about this stage will be presented in the following section of the paper.
Subsequently, a firm must choose the entry mode it wants to use. This is referred
to in the literature as the entry mode decision. At this stage a firm is choosing
between non-equity entry modes such as exporting, licensing, franchising,
management contracts, turnkey contracts or subcontracting, and equity-based
entry modes which result in establishing a company in the host country that is
either partly or wholly owned. Finally, a company must also determine the
timing of entry. All five decisions are elements of an international market entry
strategy – a comprehensive plan that is to contribute to the entry of a firm’s
products, resources and capabilities into a foreign country. The issue of
international entry strategy has been widely addressed in the literature; however,
most studies usually focus on the analysis of the strategy elements individually.
In the literature, several approaches to the international market entry strategy
have been identified (Root, 1994; Kotler, 2005; Stonehouse et al., 2001). Root
recommends a model consisting of five elements: (1) the choice of a target
product/market, (2) the objective and goals in the country, (3) the choice of entry
mode, (4) the marketing plan, and (5) the control system. There is a logical
sequence involving the above-mentioned elements, however the model does not
exclude feedback loops that make the strategy a continuing and open-ended
process in a short-time horizon (Root, 1994). Kotler also views the international
market entry strategy as a process composed of five stages, but he defines some
stages slightly differently. His proposed framework covers the following stages:
(1) the decision about international market expansion, (2) market selection,
(3) selection of entry mode, (4) the marketing plan, and (5) the marketing
organization (Kotler, 2005). Stonehouse’s model suggests four stages involving:
(1) the decision about international market expansion, (2) the overview of the
international environment in search of opportunities and threats, (3) market
selection, and (4) selection of entry mode (Stonehouse et al., 2001). While
analyzing international market entry strategy, it should be emphasized that each
individual decision is central to successful overseas expansion. The models that
have been presented confirm the complexity of the process and illustrate the
broad decision-making set related to overseas expansion.
The selection of foreign markets is one of the most critical decisions in
international market entry strategy. According to the models presented above
a company identifies the target market in which it wants to launch its product
before it selects the entry mode. A firm must choose its target market from a wide
range of national markets. The national markets often differ markedly in terms of
market size, income, level of development, language, culture, religion, political
and economic stability, social aspects and many other important dimensions. The
diversity and complexity of market opportunities is huge, hence the market
selection is a complicated process that should be well thought through.
34 D. Górecka, M. Szałucka
In the literature, several market selection models have been proposed (Root,
1994; Koch, 2001; Kumar et al., 1994; Cavusgil, 1985). They attempt to
formalize the decision-making process. IMS is usually seen as a sequential
process where each stage is aimed at progressively eliminating the less attractive
markets in order to arrive at the selection of the prospective target market at the
end of the process. The systematic approach to IMS is crucial in the context of
a decision that involves assimilating a huge amount of information from many
diverse and complex markets.
Most of the models illustrating international market selection view the
process of assessing overseas markets as composed of three stages such as
preliminary screening (or screening), in-depth screening (or identification) and
final selection (or selection) (Koch, 2001; Kumar et al., 1994; Root, 1994;
Cavusgil, 1985). Preliminary screening identifies the prospective target markets
for subsequent in-depth analysis. At this stage, companies use set of macro-level
indicators to eliminate countries that do not meet their objectives. More detailed
information about preliminary screening is provided in the next section of this
paper. During the identification stage, the attractiveness of the industry is
evaluated. A firm gathers industry-specific information such as market size and
growth, level of competition, entry barriers and market segments in order to
create a short-list of high-market-potential countries. During the final selection
stage, the company focuses on firm-specific information. It analyses
profitability, assessing forecasts of revenues and cost, compatibility with the
existing portfolio taking into consideration company objectives and goals,
resources and strategies (in fact, all stages should bear in mind company
objectives and goals, resource constraints and the adopted expansion strategy).
The final selection should highlight the country market which best matches
company objectives.
The nature of the market selection process (related to analyzing the large
number and diversity of foreign markets) means that the existing literature is
fairly consistent in describing the desirable features of market selection models.
IMS models should be flexible, comprehensive and cost-effective (Papadopoulos
and Martín Martín, 2011).
There are two basic approaches to the selection of international markets:
expansive and contractible (Root, 1994; Schroeder, 2007; Albaum and Duerr,
2008). In the expansive approach the company favours new markets that have
the least psychic distance from those in which it operates. The selection of
markets is based on similarities among markets in terms of their political,
economic and social nature. The contractible approach takes as its starting point
a global perspective including all national markets. It involves a systematic
screening of all country markets in order to eliminate the less attractive ones and
focus in greater depth on those which are more promising (Albaum and Duerr,
2008).
Country Market Selection in International Expansion… 35
1
The motives presented are directly related to equity-based modes (foreign direct
investment), however, assuming that equity-based modes are the most advanced forms
of entry modes, the group of motives should also include motives related to simpler non-
equity modes.
Country Market Selection in International Expansion… 37
for further analysis. The approach might give managers an aggregate measure of
market attractiveness that might be customized by them according to their own
preferences and priorities by assigning weights to dimensions or by adding new
dimensions (Cavusgil et al., 2004). Both methods have been recognized as
important tools for analyzing a large number of countries with heterogeneous
markets, however, both should only be used at the preliminary market
assessment stage.
4 Methodology
The present study illustrates the application of multi-criteria decision aiding
methods in the preliminary market assessment process. It is based on the
example of one of the leading manufacturers and suppliers of sanitary articles,
cosmetics and medical devices to the global market. This is an enterprise with
100% Polish capital, composed of 49 companies including 19 manufacturing
companies (in Poland, Russia, Ukraine and India), 24 trading companies (in 14
European countries, India and USA) and 6 service (medical and IT technology)
companies (in Poland and Russia). It employs over 7.4 thousand people and sells
its products in more than 70 countries worldwide (they are available in Europe,
Asia, Africa, America and Australia). Thanks to the firm’s own Research and
Development Centre, which cooperates closely with scientific institutions, its
products are manufactured using the most recent technologies. This helps the
company to compete successfully in the highly competitive markets in which it
operates2.
A concise history of the firm, emphasizing especially its foreign operations,
is presented in the Table 1.
The present simulation of an initial country selection refers to a project
already carried out by the company during the period from 2002 to 2005, namely
the investment made in India. Consequently, our study involves the verification
of a choice made in the past.
It is assumed that the main reason why the company wanted to go abroad was
to access new markets. In addition we suppose that the company was willing to
run its operations in the foreign market using an equity-based mode as it had
already had a relatively high level of experience of operating subsidiaries
abroad.
2
Information about the company comes from its website:
http://www.tzmoglobal.com/en_GLO (9 March 2013).
Country Market Selection in International Expansion… 39
Table 1
Company’s history in brief
Years Event
The company is established as a state-owned enterprise
Dressing material is produced for the Ministry of National Defence and the
Central Mining Office Supply. Production is set to shut down after
1950s completing the order but thanks to the high quality of work further orders
appear
Since the end of the 1990s the company is entitled to mark its products
with the European CE safety mark
In the early 2000s the company opens a hospital in Poland which – since
2007 –has been serving as a modern polyclinic. Since the beginning of
2000s it has also been providing a sterilization service for hospitals
Production of hygiene products in the newly built plants in the East market
starts – in 2003 in Russia and in the first quarter of 2004 in Ukraine
In 2004 the company builds a modern logistic centre in Poland (it serves as
a central distribution warehouse). The following year a training, marketing
and logistics centre is opened in Germany. Another logistics centre is
founded in 2007 in Romania
In 2008 new business units are established in Poland (e.g. a films and
laminates production plant and a clean room for medical production)
At the end of 2000s the company starts business activity in North America
– it establishes its headquarters in the United States
Source: http://www.tzmo-global.com/en_GLO/companyHistory (9 March 2013).
After considering the various alternatives we have selected 20 countries as
the target market set in order to illustrate the model. The pre-selection was
necessary to reduce the number of countries for the application of the multi-
criteria decision aiding method. The applied criteria were operationalized
40 D. Górecka, M. Szałucka
Table 2
Market potential assessment factors (dimensions, measures, units and descriptions)
Dimension Measures (units) Indicator Description
Total population
(number The total population
Market Size
of inhabitants)
(ability to sell
Urban population
products) People living in urban areas as defined by
(number
national statistical offices
of inhabitants)
Annual percentage growth rate at market
prices based on constant local currency.
Aggregates are based on constant 2000
U.S. dollars. GDP is the sum of gross value
Market growth
added by all resident producers in the
(ability to sell GDP growth rate
economy plus any product taxes and minus
products in the (annual %)
any subsidies not included in the value of
future)
the products. It is calculated without
making deductions for depreciation of
fabricated assets or for depletion and
degradation of natural resources
Economic The production of power plants and
Development Electric power combined heat and power plants less
(low productivity consumption transmission, distribution, and
of the local (kWh per capita) transformation losses and own use by heat
companies) and power plants
Quality of life Life expectancy The number of years a newborn infant
(ability to sell at birth (years) would live if prevailing patterns of
Country Market Selection in International Expansion… 41
To rank countries from the best to the worst from the point of view of
international expansion the EXPROM II method (Diakoulaki and Koumoutsos,
1991) with veto threshold has been applied. It is based on the notion of ideal and
anti-ideal solutions and enables the decision-maker to rank alternatives on
a cardinal scale. Thanks to the introduction of the veto threshold (see Appendix)
the technique is partly compensatory (a really bad score on one criterion cannot
be compensated with a good score on another).
We decided to employ this method because it is considered to be a user-
friendly one – all steps can be quite easily explained to the decision-maker as
they are neither very complex nor mathematically challenging. Moreover, this
technique allows us to obtain a complete pre-order of the alternatives to which
the points are assigned in the final solution. This form of the final solution is
recognized as being convincing for the potential users of MCDA methods.
To check the impact of changes in the weights of evaluation criteria on the
final rankings of countries we have established five different vectors of
weighting coefficients. The first two vectors were determined arbitrarily by the
present authors, the third one was created with the help of Hinkle’s method,
which is also called the ‘resistance to change’ grid (Hinkle, 1965; Rogers and
Bruen, 1998), and the fourth one used the AHP method (Saaty, 2006; Saaty and
Vargas, 1991). In the last approach all measures were assumed to be equally
important. The authors also established the values of indifference (q), preference
(p) and veto (v) thresholds. The model of preferences for the decision-making
problem is presented in the Table 3.
Country Market Selection in International Expansion… 43
Table 3
Model of preferences
Max Vectors of weighting coefficients
Measure q p v
/min I II III IV V
Total
max 0,089 0,100 0,120 0,136 0,067 10 ml 100 ml 500 ml
population
Urban
max 0,089 0,100 0,120 0,136 0,067 5 ml 50 ml 300 ml
population
GDP growth
max 0,107 0,133 0,120 0,113 0,067 0,5 1 10
rate
Electric
power min 0,071 0,067 0,060 0,04 0,067 100 1000 10 000
consumption
Life
max 0,036 0,033 0,010 0,02 0,067 3 10 25
expectancy
Sanitation
max 0,036 0,033 0,010 0,02 0,067 5 10 25
facilities
Road density max 0,036 0,033 0,010 0,02 0,067 5 50 200
Internet users max 0,036 0,033 0,010 0,02 0,067 5 10 40
GDP per
min 0,071 0,067 0,060 0,04 0,067 500 5000 30 000
capita
Trade max 0,107 0,067 0,120 0,113 0,067 5 15 50
Cultural
min 0,107 0,100 0,120 0,113 0,067 5 10 40
distance
Labour force max 0,054 0,067 0,060 0,057 0,067 5 ml 20 ml 100 ml
Cotton
max 0,054 0,067 0,060 0,057 0,067 10 100 20 000
production
FDI net
max 0,054 0,050 0,060 0,057 0,067 0,5 3 10
inflows
Economic
max 0,054 0,050 0,060 0,057 0,067 5 10 40
freedom
5 Results
Table 4 provides a summary of the results obtained by applying the EXPROM II
technique with veto threshold using 5 different vectors of weighting coefficients.
The rankings presented in Table 4 show the sensitivity of the solutions to the
changes in the vectors of weights as the modifications of the parameter values led
to alterations in countries’ rankings.
The different rankings of the countries obtained are not in agreement.
However, in spite of that it is possible to determine the set of countries which are
the best, taking into account their attractiveness as the target of international
expansion for the company considered (China and Thailand), the set of countries
which are quite good as the values of net flows determined for them are in all
cases positive (Brazil, France, India, Italy, Mexico, Philippines, the United States
and Vietnam) and the set of countries which are the worst (Bangladesh, Ethiopia,
Indonesia, Iran, Nigeria, Pakistan and Turkey). Egypt, Japan and the United
Kingdom may be regarded as controversial since in some cases the values of net
flows determined for them are positive and in some cases – negative.
44 D. Górecka, M. Szałucka
Table 4
Rankings of the countries obtained using EXPROM II method
with veto threshold and 5 different vectors of weights
EXPROM II with veto threshold No.
No.
Vector no. 1 Vector no. 2 Vector no. 3 Vector no. 4 Vector no. 5
To sum up, taking into account all the results we have obtained, the following
countries are recommended for further analysis (in-depth screening and final
selection) – excluding China and Thailand: Brazil, France, India, Italy, Mexico,
Philippines, the United States and Vietnam.
Country Market Selection in International Expansion… 45
To check the impact of the method applied on the final rankings of the
countries we have employed two other outranking techniques, namely the
PROMETHEE II method with veto threshold (Górecka and Pietrzak, 2012) and
the modified ELECTRE III method (Górecka, 2009). The results obtained with
the help of them are presented in Tables 7 and 8. In both cases five
aforementioned vectors of weighting coefficients have been applied to show the
influence of changes in the weights of evaluation criteria on the final rankings of
countries examined.
46 D. Górecka, M. Szałucka
Table 6
Ranges of variations of the indifference and preference thresholds values
in the case of EXPROM II method with veto threshold applying equal weights
(the fifth vector of weighting coefficients)
q p
Measure q min q max p min* p max**
original original
Total population 0 10 ml 100 ml 95,88 ml 100 ml 500 ml
Urban population 0 5 ml 50 ml 47,46 ml 50 ml 300 ml
GDP growth rate 0 0,5 1 0,88 1 1,61
Electric power
0 100 1000 100 1000 2474,98
consumption
Life expectancy 0 3 10 6,35 10 10,39
Sanitation facilities 0 5 10 9,33 10 12,47
Road density 0 5 50 33,53 50 52,76
Internet users 0 5 10 5 10 25,96
GDP per capita 0 500 5000 4466,96 5000 7885,30
Trade 0 5 15 14,47 15 17,26
Cultural distance 0 5 10 5 10 10,51
Labour force 0 5 ml 20 ml 19,68 ml 20 ml 38,00 ml
Cotton production 0 10 100 10 100 116,57
FDI net inflows 0 0,5 3 1,40 3 3,04
Economic freedom 0 5 10 5 10 10,39
* Values are rounded up to the nearest hundredth.
** Values are rounded down to the nearest hundredth.
Once again, it can be easily noticed that the rankings obtained do not differ
much from each other. Hence, it is possible to determine the set of countries
which are the best, taking into account their attractiveness as the target of
international expansion for the considered company (China and Thailand in the
case of the PROMETHEE II method with veto threshold; Brazil, China and
Mexico in the case of the modified ELECTRE III method), the set of countries
which are quite good (Brazil, France, India, Italy, Mexico, Philippines, the
United States and Vietnam in the case of the PROMETHEE II method with veto
threshold 3 ; France, India, Indonesia, Italy, the United States, Thailand and
Vietnam in the case of the modified ELECTRE III method 4 ) and the set of
countries which are the worst (Bangladesh, Ethiopia, Indonesia, Iran, Nigeria,
Pakistan and Turkey in the case of the PROMETHEE II method with veto
threshold5; Bangladesh, Egypt, Ethiopia, Iran, Pakistan and Turkey in the case of
the modified ELECTRE III method6).
3
The values of net flows determined for them are in all cases positive.
4
The differences between the number of countries outranked by them and the
number of countries that outranks them are in all cases non-negative.
5
The values of net flows determined for them are in all cases negative.
6
The differences between the number of countries outranked by them and the
number of countries that outranks them are in all cases negative.
Country Market Selection in International Expansion… 47
Table 7
Rankings of the countries obtained using PROMETHEE II method
with veto threshold and 5 different vectors of weights
PROMETHEE II with veto threshold
No. No.
Vector no. 1 Vector no. 2 Vector no. 3 Vector no. 4 Vector no. 5
1 Thailand China Thailand China Thailand 1
2 China Thailand China Thailand China 2
3 Brazil Brazil Brazil Brazil Italy 3
4 Italy Italy Mexico Mexico Brazil 4
5 France France France Italy France 5
6 Mexico Mexico Italy France Mexico 6
7 Philippines India India India Vietnam 7
8 Vietnam Vietnam Philippines Vietnam Philippines 8
9 India Philippines Vietnam Philippines India 9
10 United States United States United States United States United States 10
11 Egypt, 11
Japan Japan Japan Japan
Arab Rep.
12 Egypt, Egypt, Egypt, United 12
Japan
Arab Rep. Arab Rep. Arab Rep. Kingdom
13 United Iran, Egypt, 13
Indonesia Indonesia
Kingdom Islamic Rep. Arab Rep.
14 United United United 14
Indonesia Turkey
Kingdom Kingdom Kingdom
15 Iran, Iran, Iran, 15
Indonesia Indonesia
Islamic Rep. Islamic Rep. Islamic Rep.
16 Iran, 16
Turkey Turkey Turkey Turkey
Islamic Rep.
17 Nigeria Bangladesh Nigeria Nigeria Bangladesh 17
18 Bangladesh Nigeria Bangladesh Bangladesh Nigeria 18
19 Ethiopia Pakistan Ethiopia Pakistan Pakistan 19
20 Pakistan Ethiopia Pakistan Ethiopia Ethiopia 20
Furthermore, it should be noted that rankings obtained with the help of three
different MCDA techniques are similar. This observation can be confirmed by
the Spearman rank correlation coefficients presented in Table 9. These
coefficients, calculated separately for each of five vectors of weights considered,
indicate the existence of strong correlation dependencies between the obtained
orderings of the countries.
48 D. Górecka, M. Szałucka
Table 8
Rankings of the countries obtained using
modified ELECTRE III method and 5 different vectors of weights
Modified ELECTRE III
No. No.
Vector no. 1 Vector no. 2 Vector no. 3 Vector no. 4 Vector no. 5
1 Brazil Brazil Brazil Brazil Brazil 1
2 China China China China China 2
3 Mexico Mexico Mexico Mexico Mexico 3
4 India India India India Italy 4
5 United United 5
Indonesia Indonesia Thailand
States States
6 Vietnam Vietnam Vietnam Indonesia France 6
7 Thailand France Thailand Vietnam India 7
8 United 8
France France France Indonesia
States
9 United 9
Italy Thailand Indonesia Thailand
States
10 United United 10
Nigeria Italy Japan
States Kingdom
11 United 11
Italy Italy Japan Philippines
Kingdom
12 Japan Japan Japan Philippines Vietnam 12
13 United United 13
Philippines Philippines Philippines
Kingdom Kingdom
14 Egypt, United 14
Nigeria Nigeria Bangladesh
Arab Rep. Kingdom
15 Egypt, Iran, Egypt, Egypt, 15
Turkey
Arab Rep. Islamic Rep. Arab Rep. Arab Rep.
16 Iran, Iran, Iran, Egypt, 16
Turkey
Islamic Rep. Islamic Rep. Islamic Rep. Arab Rep.
17 Iran, 17
Turkey Bangladesh Turkey Turkey
Islamic Rep.
18 Bangladesh Nigeria Bangladesh Bangladesh Pakistan 18
19 Ethiopia Ethiopia Pakistan Pakistan Nigeria 19
20 Pakistan Pakistan Ethiopia Ethiopia Ethiopia 20
To sum up, the analysis performed has illustrated that the solutions obtained
are quite robust to changes in the values of the parameters of the preference
model. It has also shown that the rankings of the countries are not very sensitive
to choice of the decision-aiding technique.
Taking into account all the results of the research conducted, the following
countries are recommended for further analysis (in-depth screening and final
selection): Brazil, China, France, India, Italy, Mexico, Thailand, the United
Country Market Selection in International Expansion… 49
States and Vietnam. The Philippines has been removed from this list as
according to the results obtained with the help of the modified ELECTRE III
method it does not belong either to the set of countries which are the best or to
the set of countries which are quite good from the point of view of their
attractiveness as the target of international expansion for the company 7
considered.
Table 9
Spearman rank correlation coefficients
Vector no. 1
Method EXPROM II PROMETHEE II Modified ELECTRE III
EXPROM II 1,0000 0,9970 0,8748
PROMETHEE II 0,9970 1,0000 0,8718
Modified ELECTRE III 0,8748 0,8718 1,0000
Vector no. 2
Method EXPROM II PROMETHEE II Modified ELECTRE III
EXPROM II 1,0000 0,9955 0,8195
PROMETHEE II 0,9955 1,0000 0,8150
Modified ELECTRE III 0,8195 0,8150 1,0000
Vector no. 3
Method EXPROM II PROMETHEE II Modified ELECTRE III
EXPROM II 1,0000 0,9955 0,8711
PROMETHEE II 0,9955 1,0000 0,8598
Modified ELECTRE III 0,8711 0,8598 1,0000
Vector no. 4
Method EXPROM II PROMETHEE II Modified ELECTRE III
EXPROM II 1,0000 0,9985 0,8699
PROMETHEE II 0,9985 1,0000 0,8662
Modified ELECTRE III 0,8699 0,8662 1,0000
Vector no. 5
Method EXPROM II PROMETHEE II Modified ELECTRE III
EXPROM II 1,0000 0,9985 0,8831
PROMETHEE II 0,9985 1,0000 0,8966
Modified ELECTRE III 0,8831 0,8966 1,0000
7 Conclusions
In reality, the firm that formed the basis of our analysis of its international
expansion has chosen India. It is not grossly at variance with the results we have
obtained due to the fact that India is in the group of countries selected for further
analysis. Within this group – as expected – emerging markets predominate as
7
According to the solutions obtained using modified ELECTRE III method the
Philippines belongs to the set of countries which are quite bad from the point of view of
international expansion since the differences between the number of countries outranked
by it and the number of countries that outranks it are in all cases non-positive.
50 D. Górecka, M. Szałucka
8
The idea of PROMETHEE methodology is presented in Brans and Vincke (1985)
and description of PROMETHEE techniques can be found in Brans et al. (1986).
9
The values can be also defined independently from the examined alternatives,
representing – in the case of the ideal solution – some realistic goals and in the case of
the anti-ideal solution – the situation that should be avoided.
Country Market Selection in International Expansion… 51
∑w k = 1,
where: k =1
⎧1, if f k (a i ) − f k (a j ) > p k ,
⎪
⎪ f (a ) − f k (a ) − q k
i j
ϕ k (a , a ) = ⎨ k
i j
, if q k < f k (a i ) − f k (a j ) ≤ p k ,
⎪ pk − qk
⎪0 otherwise,
⎩
1 − d k (a i , a j )
σ (a i , a j ) = c (a i , a j ) ∏
k∈D ( a i ,a j ) 1 − c(a , a )
i j
D (a i , a j ) = {k : d (a i , a j ) > c(a i , a j )}
where: k .
4. Determination of strict preference indices for each pair of alternatives
(a i , a j ) :
n
π (a i , a j ) =ν (a i , a j ) ⋅ ∑ wk π k (a i , a j ),
k =1
where:
⎧⎪1, gdy ∀k : d k (a i , a j ) ≤ c(a i , a j ),
ν (a i , a j ) = ⎨
⎪⎩0 , gdy ∃k : d k (a i , a j ) > c(a i , a j ),
52 D. Górecka, M. Szałucka
⎧ f k (a i ) − f k (a j ) − p k
⎪ , if ϕ k (a i , a j ) = 1,
π k (a i , a j ) = ⎨ f k (a * ) − f k (a * ) − p k
⎪0 otherwise.
⎩
5. Calculation of total preference index for each pair of alternatives (a i , a j ) :
ω (a i , a j ) = min {1; σ (a i , a j ) + π (a i , a j )}
.
6. Calculation of outgoing flow φ (a ) and incoming flow φ (a ) for each
+ i − i
alternative:
m
φ + (a i ) = ∑ ω (a i , a j )
j =1
m
φ − (a i ) = ∑ ω(a j , a i ).
j =1
References
Albaum G., Duerr E. (2008), International Marketing and Export Management,
6th ed., Pearson Education Limited, Essex.
Brans J.P., Vincke Ph. (1985), A Preference Ranking Organization Method: The
PROMETHEE Method for Multiple Criteria Decision-Making, Management
Science, 31, p. 647-656.
Country Market Selection in International Expansion… 53
Brans J.P., Vincke Ph., Mareschal B. (1986), How to Select and How to Rank
Projects: The PROMETHEE Method, European Journal of Operational
Research, 24, p. 228-238.
Cavusgil S.T. (1985): Guidelines for Export Market Research, Business
Horizons, November-December.
Cavusgil S.T. (1997), Measuring the Potential of Emerging Markets: An
Indexing Approach, Business Horizons, January-February.
Cavusgil S.T. (2004), Complementary Approaches to Preliminary Foreign
Market Opportunity Assessment: Country Clustering and Country Ranking,
Industrial Marketing Management, Vol. 33.
Cooper R.G., Kleinschmidt E.J. (1985), The Impact of Export Strategy on Export
Sales Performance, Journal of International Studies, Spring.
Diakoulaki D., Koumoutsos N. (1991), Cardinal Ranking of Alternative Actions:
Extension of the PROMETHEE Method, European Journal of Operational
Research, 53, p. 337-347.
Douglas S.P. et al. (1982), Approaches to Assessing International Marketing
Opportunities for Small-and Medium-sized Companies, Columbia Journal of
World Business, Vol. 17, No. 3.
Dunning J.H. (1988), The Theory of International Production, The International
Trade Journal, Vol. 3, No. 1.
Dunning J.H. (1993), Multinational Enterprises and the Global Economy,
Addison-Wesley Publishing Company, Wokingham.
Gaston-Breton Ch., Martín Martín O. (2011), International Market Selection and
Segmentation: A Two-stage Model, International Marketing Review, Vol. 28,
No. 3.
Górecka D. (2009), Wielokryterialne wspomaganie wyboru projektów
europejskich, TNOiK „Dom Organizatora”, Toruń.
Górecka D., Pietrzak M.B. (2012), Zastosowanie metody PROMETHEE II
w procesie rankingowania projektów europejskich w ramach Regionalnego
Programu Operacyjnego Województwa Kujawsko-Pomorskiego na lata 2007-
2013, in: Modelowanie Preferencji a Ryzyko '12, Zeszyty Naukowe
Wydziałowe Uniwersytetu Ekonomicznego w Katowicach, p. 97.
The Heritage Foundation, www.heritage.org (10 March 2013).
Hinkle D. (1965), The Change of Personal Constructs from the Viewpoint of
a Theory of Construct Implications, Ph.D. Dissertation, Ohio State University,
Ohio.
The Hofstede Centre, geert-hofstede.com (10 March 2013).
54 D. Górecka, M. Szałucka
Johanson J., Vahlne J.E. (1977), The Internationalization Process of the Firm –
A Model of Knowledge Development and Increasing Foreign Market
Commitments, Journal of Business Studies, Vol. 8, No. 1.
Johanson J., Vahlne J.-E. (1990), The Mechanism of Internationalization,
International Marketing Review, Vol. 7, No. 4.
Johanson J., Wiedersheim P.F. (1975), The Internationalization of the Firm –
Four Swedish Cases, The Journal of Management Studies, Vol. 12, No. 3.
Koch A.J. (2001), Selecting Overseas Markets and Entry Modes: Two Decision
Process or One? Marketing Intelligence & Planning, Vol. 19, No. 1.
Kotler P. (2005), Marketing, Rebis, Poznań.
Kumar V. et al. (1994), An Interactive Multicriteria Approach to Identifying
Potential Foreign Markets, Journal of International Marketing, Vol. 2, No. 1.
Morosini, P. et al. (1998), National Cultural Distance and Cross-border
Acquisition Performance, Journal of International Business Studies, Vol. 29,
p. 37-58.
Natarajarathinam M., Nepal B. (2012), A Holistic Approach to Market
Assessment for Manufacturing Company in an Emerging Economy, Industrial
Marketing Management, Vol. 41.
Papadopoulos N. et al. (2002), Toward a Tradeoff Model for International
Market Selection, International Business Review, Vol. 11.
Papadopoulos N., Denis J.E. (1988), Inventory Taxonomy and Assessment of
Methods for International Market Selection, International Marketing Review,
Autumn.
Papadopoulos N., Martín Martín O. (2011), International Market Selection and
Segmentation: Perspectives and Challenges, International Marketing Review,
Vol. 28, No. 2.
Porter M.P. (2001), Porter o konkurencji, Polskie Wydawnictwo Ekonomiczne,
Warszawa.
Rogers M., Bruen M. (1998), A New System for Weighting Environmental
Criteria for Use within ELECTRE III, European Journal of Operational
Research, Vol. 107, No. 3.
Root F.R. (1994), Entry Strategies for International Markets, Jossey-Bass, San
Francisco.
Russow L.C., Okoroafo S.C. (1996), On the Way Towards Developing a Global
Screening Model, International Marketing Review, Vol. 13, No. 1.
Country Market Selection in International Expansion… 55
Saaty T.L. (2006), Fundamentals of Decision Making and Priority Theory with
the Analytic Hierarchy Process, Vol. VI of the AHP Series, RWS
Publications, Pittsburgh.
Saaty T.L., Vargas L.G. (1991), The Logic of Priorities. Applications of the
Analytic Hierarchy Process in Business, Energy, Health & Transportation,
Vol. III of the AHP Series, RWS Publications, Pittsburgh.
Sakarya S. et al. (2007), Market Selection for International Expansion.
Assessing Opportunities in Emerging Markets, International Marketing
Review, Vol. 24, No. 2.
Samli A.C. (1977), An Approach For Estimating Market Potential in East
Europe, Journal of International Business Studies, Vol. 8, No. 2.
Schroeder J. (2007), Badania marketingowe rynków zagranicznych, Akademia
Ekonomiczna, Poznań.
Sheng S.Y., Mullen M.R. (2011), A Hybrid Model for Export Market
Opportunity Analysis, International Marketing Review, Vol. 28, No. 2.
Stonehouse G. et al. (2001), Globalizacja. Strategia i zarządzanie,
Wydawnictwo FELBERG SJA, Warszawa.
Toruńskie Zakłady Materiałów Opatrunkowych, www.tzmo-global.com
(9 March 2013).
Vernon R. (1996), International Investment and International Trade in the
Product Cycle, The Quarterly Journal of Economics, No. 2.
Whitelock J., Jobber D. (2004), An Evaluation of External Factors in the
Decision of UK Industrial Firms to Enter a New Non-domestic Market:
An Exploratory Study, European Journal of Marketing, Vol. 38, No. 11/12.
World Bank, www.worldbank.org (10 March 2013).
Copyright of International Workshop on Multiple Criteria Decision Making is the property of
University of Economics in Katowice and its content may not be copied or emailed to
multiple sites or posted to a listserv without the copyright holder's express written permission.
However, users may print, download, or email articles for individual use.